Office for Budget Responsibility slams national living wage

Robert Chote, says better-off households will earn more under the new policyRichard Pohle/The Times

Government claims that the national living wage will help poor households have been blasted by a member of its own economic watchdog.

The chancellor made plans to increase wages for those on low pay the centrepiece of his budget last week to soften the blow of in-work welfare cuts. The legally enforced pay rises are expected to cost business £4 billion a year, in an attempt to offset a £12 billion cut in welfare, about £9 billion of which is to working-age benefits.

However, Sir Stephen Nickell, a director of the Office for Budget Responsibility, attacked the claim in testimony to MPs yesterday.

“It is well known that the proportion of people in receipt of the minimum wage who live in poor households is very…